Skip to main content Skip to footer

Case Study

Permitted Rights Scheme PRS Development Finance



A Permitted Rights Scheme development in East Croydon of 258 high-spec residential units. There were no pre-sales but significant interest from housing associations in securing attractive terms.
  • Leverage Secured 65% LTC
  • Saving (Net of Fees) £2.6m
  • Lender

    US PE Credit Fund


Deal Outline

Assets

  • GDV £106m

Security

  • First charge on development site and 258 units

Income

  • N/A (Development Funding)

Requirements

  • £58 million, 65% LTC
  • Specialist provider
  • Interest roll-up

Challenges

  • No pre-sales
  • Competitive market with plenty of new residential supply

Facility Secured

  • 24 month facility
  • 65% LTC, interest roll-up
  • Highly competitive terms

Summary


A large privately owned development and asset management group were performing a Permitted Rights development in East Croydon. The scheme involved the conversion of a 20 storey 1960s office tower into 258 modern, high-spec residential units. While there were no pre-sales, there was significant interest for units from housing associations.

The client utilised us to benchmark the terms of its existing lending relationship. In addition to full underwriting and credit analysis, we conducted drone footage of the asset to show credit providers the physical attributes of the building, its surrounding locality and nearby competitor offering.

The team obtained significantly improved terms from a US PE credit fund, including a 140 bps reduction in the margin, a 100 bps saving in the arrangement fee, 75 bps reduction in the no utilisation fee and a 150 bps reduction in the exit fee. This equated to a £2.6m saving, net of fees. Aside from the better pricing, the new lender was able to transact more expediently thereby minimising transaction risk.


Please see below to view more case studies, all real estate debt advisory services, or to simply connect with one of our experts.
View Debt Advisory Services